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Most companies preparing for the Corporate Sustainability Reporting Directive (CSRD)’s ESRS S1 are focused on quantitative requirements such as headcount, turnover rates, gender pay gap, training hours. That data is hard to pull and getting it into reportable shape takes time. Fair.
But buried in the standard is a requirement that’s getting less attention and is, in some ways, harder to satisfy: how do the perspectives of your own workforce inform the decisions you make about them? And how do you measure the effectiveness of your concern-raising channels?
This is Disclosure Requirement S1-2. And the honest answer at most large companies is something like: “We run an annual engagement survey, and the results influence some HR decisions, but we’ve never described that as a formal governance mechanism and we certainly haven’t thought about how to disclose it. We also haven’t asked what else we might be measuring that could satisfy this requirement.”
That gap is worth closing.
What S1-2 actually requires
S1-2 asks companies to describe their processes for engaging with their workforce about actual and potential impacts on that workforce. The standard wants specific details, such as what channels exist, how frequently they’re used, how feedback is recorded, how it flows into decision-making, and whether employees can see the effect of their input.
Since this is really a governance question, rather an HR communications question, it’s important to frame this properly from a board perspective. How does your organization know what’s happening to its people, and how does that information get used? Where are the quiet parts of your business, where perhaps your speak-up channels aren’t trusted?
The standard also draws a distinction between passive information-sharing and genuine dialogue. Engagement through manager newsletters doesn’t qualify. Neither does a once-a-year survey that lives in a leadership deck and doesn’t produce any visible action. The standard asks whether there’s a documented, repeatable process, and whether people affected by decisions are part of the conversation before those decisions are made.
Where culture surveys fit in
Most large companies already have a culture or engagement survey infrastructure. Some run it annually, others quarterly via pulse surveys. These tools often generate the kind of data S1-2 is asking about. They capture perceptions of psychological safety, fairness, inclusion, and working conditions. They also document whether employees feel heard, whether they’ve observed misconduct, and whether they trust the speak-up process.
Unfortunately, this data typically lives inside HR, which treats it as an operational tool. used that way, it might influence a training initiative or a manager development program, or it might inform an audit process if is uncovers a speak-up issue. But it’s usually not connected to the formal process of understanding and managing material impacts on the workforce, which is exactly what S1-2 requires.
The most prepared companies are actively closing that gap. They’re documenting survey methodology in a way that could survive external scrutiny, focusing on sample coverage, anonymity protections, response rates by segment, and validation of results. They’re also building an explicit link between survey findings and the company’s double materiality assessment; If employees consistently flag concerns about workload or psychological safety, that’s evidence of potential material impact, and the reporting needs to address it. And, they’re also creating governance around what happens after the survey, not just action planning, but a formal feedback loop that employees can actually see, something that demonstrates their input shaped a decision.
Some are going further. Where survey data segments by geography, employment type, or seniority, it can support other ESRS S1 disclosures around equal treatment, working conditions, and diversity. A well-designed culture survey, if properly connected to the broader disclosure framework, can do a lot of work across multiple requirements.
What good looks like in practice
A well-constructed disclosure under S1-2 doesn’t just say “we conduct an annual employee survey.” It explains what the survey covers and how those topics connect to material workforce impacts. It names who reviews the results, at what level of the organization, and on what cadence. And it describes what changed as a result of findings in the prior period.
That’s a high bar, and most companies simply aren’t there yet. But assurance providers reviewing CSRD reports are already asking for evidence of engagement processes, not just descriptions of them. If a disclosure states that employee perspectives inform decisions, auditors will want to see the mechanism.
One thing worth noting: the Omnibus simplification that took effect in 2025 cut more than half of ESRS S1’s original mandatory datapoints. That reduced the overall disclosure burden, but the engagement and governance requirements in S1-2 remained in force.
A practical starting point
If you’re working toward your first or second CSRD reporting cycle, the most useful conversation you can have right now is between your sustainability function and whoever owns your culture surveys. The survey may already be generating the right data. The question is whether there’s a documented process showing it flows into decisions, and whether that process is visible enough to employees that they’d recognize it.
If that documentation doesn’t exist yet, you have time to build it. But retrofitting a governance narrative after the disclosure is already filed is harder than getting the process right before reporting begins.
The data is probably already there. The work is in connecting it.
Author Bio
Erica Salmon Byrne, J.D. | Chief Strategy Officer and Executive Chair, Ethisphere
As Chief Strategy Officer and Executive Chair, Erica Salmon Byrne is responsible for ensuring continuous and strong growth for the company while maintaining Ethisphere’s founding ethos that good businesses do better.
